The announcement, made official through a statement by Cameroon’s Finance Minister Louis Paul Motazé, marks a significant step in the implementation of the Economic Partnership Agreement (EPA) between Yaoundé, the European Union, and the United Kingdom. This reduction applies to the third category of goods, identified as critical for public revenue due to their substantial contribution to customs income. The phased approach involves an annual tariff decrease of 10%, culminating in complete elimination by 2030.

The adjustment primarily benefits utility vehicles, fuels, cements, paints, and industrial packaging originating from the EU and the UK. It extends a timeline already in motion for the first two categories. Since August 4, 2023, goods in the second category—including plasters, clinkers, trucks, trailers, and generators—enter Cameroon duty-free. Meanwhile, the first category, encompassing pharmaceuticals, fertilizers, pesticides, computers, gas, and tractors, has enjoyed tariff-free entry since August 4, 2019.

Yaoundé balances fiscal impact of EPA concessions

When the EPA was first introduced, concerns arose about its potential to create a significant budgetary shortfall. Yet, official data reveals that over a decade, the cumulative loss in customs revenue amounts to approximately 103 billion FCFA, averaging just over 10 billion FCFA annually. While this figure is considerable, it remains manageable within the broader economic context.

Remarkably, Cameroon’s total customs revenue surpassed the 1,000 billion FCFA threshold for the first time in 2023. This seemingly contradictory surge, despite declining tariffs on European imports, stems from a strategic shift in trade flows. Diversification toward Asian markets, particularly China, has offset the revenue erosion from EU imports by broadening the tax base.

China emerges as unexpected winner of EPA

The irony lies in the fact that preferential tariffs granted to European goods have not weakened China’s dominance in Cameroon’s trade. Beijing became the country’s top bilateral trade partner in 2013, a position it has maintained and expanded. The 2024 Competitiveness Report by Cameroon’s Ministry of Economy quantifies this trend.

In the machinery and equipment sector, China’s market share skyrocketed from 23.8% in 2016 to 52.5% in 2024, a gain of 28.7 percentage points. Meanwhile, the EU’s share plummeted from 50.1% to 29.3% in 2023, with a slight rebound to 32.3% in 2024—a decline of nearly 20 points. This sharp contrast raises questions about the effectiveness of tariff preferences for European industries in the face of China’s aggressive pricing strategy.

Benefits skewed toward a select few

An analysis of EPA beneficiaries highlights another structural flaw in the agreement. By December 31, 2023, out of 1,021 companies utilizing the EPA’s preferential tariffs, fewer than 5% captured roughly 75% of the tax benefits. The disparity extends to company size, with large enterprises securing 80% of the gains, leaving only 20% for small and medium-sized businesses. This imbalance reflects both Cameroon’s formal import structure and the uneven capacity of businesses to navigate preferential customs procedures.

According to the Competitiveness Committee, “an examination of the top 50 companies leveraging EPA tariffs reveals a strong concentration in industrial and commercial sectors.” With full tariff elimination slated for 2030, policymakers now face a critical decision: preserving historical ties with Europe or adapting to an economy increasingly shaped by China’s influence. Discussions on revising the agreement are already underway, underscored by this shifting trade dynamic.